Three industry bodies have offered overall support for the European Commission's proposals for derivatives markets, but opposed measures they claim could be detrimental to over-the-counter trading.
Regulatory attempts to reduce systemic risk within the financial sector should not extend to non-financial sector companies, according to the London-based Association of Corporate Treasurers (ACT).
Legal battles over a series of collapsed structured finance transactions in which a subsidiary of Lehman Brothers was the swap counterparty could produce divergent opinions from US and English courts, causing far-reaching consequences for trustees and...
Airlines with fleets of unencumbered aircraft are starting to use them instead of cash as collateral required for large margin calls in derivatives trades, such as fuel hedges.
The second phase of the International Swaps and Derivatives Association's collateral dispute resolution protocol prescribes a market polling mechanism for settling disputes involving illiquid and complex transactions. How will the market poll work and...
Following the losses suffered in the wake of the collapse of Lehman Brothers last September, hedge funds are increasingly looking to place initial margin with bankruptcy-remote third-party custodians. But prime brokers are staunchly refusing to surrender...
Collateral management functions currently exchange margin call notices and confirmation of interest payment by email, but the need for automation is becoming more urgent. The industry is looking to define the sequence of messages that would need to be...
Following the banking crisis, the burden of counterparty risk has increased the need for transparency and liquidity in the structured products market. While a move to listing products and exchange-trading helps offer this, how does it affect counterparty...
The Financial Services Authority (FSA) has started investigating how large investment banks manage their collateral, fearing they may not be ready for a sudden market downturn.
JP Morgan Chase has developed a collateral management service called JP Morgan CommanD.
Modelling counterparty credit exposure for credit derivatives is more complicated than for non-credit products, since the reference credit and counterparty can exhibit positive default correlation. Here, Christian Hille, John Ring and Hideki Shimamoto...
The proliferation of credit derivatives has given rise to the widespread use of collateralization—posting collateral against the risk of default. But as Saskia Scholtes reports, this practice may be creating its own risks.